In 2014, the tax charge would have been £2.5 billion for the
year. However, in 2015, there was a tax credit of £361 million,
according to CNOOC’s annual report for last year as pointed out
by The Times.

Although CNOOC will not not receive the full benefit of the
£2 billion break this year, it said in its report, “our
income tax credit changed 114% mainly because the UK government
decreased the combined income tax rate on North Sea oil and gas
activities from 62% to 50% [which] resulted in a one-time
reversal of deferred tax liability.”

Why China invested in a struggling sector

Reuters

In March last year, Osborne cut taxes for oil companies in a bid
to counteract plunging oil prices and dwindling reserves.

Two things were making the North Sea undesirable for companies.
Oil prices fell to low double digits from over $100 per barrel in
June 2014— oil prices are still struggling to stay above $50 per
barrel. Meanwhile, North Sea oil reserves are drying up.

Scotland also massively depends on oil for revenue. Data
from the National Institute of Economic and Social Research
(NIESR) shows that North Sea contributes around £10 billion
to the Scottish economy.

So, when Osborne cut taxes to keep companies there and jobs
going, China saw an opportunity to broaden its marketshare —
looking at the long term, rather than the short term.

"It may be part of a general strategy to boost the credibility
and legitimacy of Chinese companies operating within Europe,"
Jeffrey Henderson, professor of international development at
Bristol University, told The Times.